Named by readers of Which? Magazine as Britain's favorite retailer, the John Lewis Partnership is probably the best-known successful employee-owned company in the country. All employees at John Lewis are partners; this year, they received an 18 percent bonus, equivalent to nine weeks' full pay. Of the year's pre-tax profit of £319m, £164m was re-invested and the rest was shared between the partners.
The company's 68,000 permanent staff own 26 department stores, 185 supermarkets, an online catalog, three production units, a farm and Greenbee, a tickets, travel and insurance service. The whole group had a combined turnover of nearly £6bn last year.
As further evidence of JLP's reliance on its partners' skills and expertise, its website (re-launching on August 29) will rely on them for podcasts and explanations of products. Speaking to the Guardian, David Walmsley, JLP's head of web selling, describes his mission as aiming for "a more rounded retail experience," offering the same high quality customer service available in their bricks and mortar premises.
Although JLP is a success, the Guardian reports that employee-owned companies are not yet overwhelmingly popular, comprising only an estimated two percent of the economy, or £25bn in annual turnover. This contrasts with results of a survey conducted in 2005 by the Employee Ownership Association which showed that 72 percent of respondents thought staff worked harder under a co-ownership structure, 81 percent said they took more responsibility, 49 percent thought competitiveness was enhanced, and 44 percent confirmed profits were higher.
The association's executive director, Patrick Burns, believes they have potential, however, to expand. "You get a remarkable level of employee involvement and people are prepared to go the extra mile. People feel their companies are more productive, and the companies are very sustainable."
According to the Guardian, Tracey Killen, JLP's director of personnel, believes that "the great strength of the partnership's model is that employees have a real stake in the business...Co-ownership allows the partnership to take a long-term view, because we do not have to answer to external shareholders who are usually seeking quick returns."
Shared ownership isn't everyone's cup of tea. Critics doubt the ability to make the right decisions and make them quickly, but proponents argue that not everyone has to be consulted on every decision and point out that sometimes it's about quality of management rather than company structure.
Discussion Questions: Why don't you think more businesses consider the benefits of employee ownership? Do you think that inertia prevents more companies from changing their structure to one that could be potentially more profitable and productive? Or are their some benefits to non-employee owned companies that the article didn't' include?